TUBE INVESTMENTS OF INDIA Q2FY23 Earnings Call Highlights
ROIC annualized at 56% for the quarter compared with 48% in the previous year same period. Free cash flow for the quarter was at INR 119 crores.
Acquired a 76% equity stake in Moshine Electronics Private Limited on 23rd September 2022. Moshine is a company engaged in the manufacturing of camera modules for mobile phones.
As a part of its strategy to pursue opportunities in clean mobility, the company's subsidiary, TI Clean Mobility Private Limited, acquired a 65.2% equity stake in IPLT on 21st September 2022. IPLT is a manufacturer of electric heavy commercial vehicles.
Engineering, metal forming products and industrial chain divisions performed very well in the domestic market but faced challenges in the exports business. Mobility division had a lower profit due to shrinking of volumes in the industry.
On the export side, because of subdued demand and the stock pileup, the customers are trying to liquidate the stock and they are correcting the stock. Hope that in the coming quarters, the demand will pick up once the stock has come to a normal level.
Commodity prices are softening. Yet to see the phenomena of price reductions taking place.
Margin expansion in engineering businesses, there was a pending settlement with the customers as well as suppliers. So one time settlement has happened for this quarter.
Weakening rupee is going to support exports going forward, in discussions with all the OEMs and distributors in the exports business and going forward, expect the businesses should improve in exports.
CG might start pursuing its own CG-1, CG-2, CG-3 at some point in time.
Started off with 40 dealers and want to keep it tight in the beginning. Had tremendous interest and potential new dealerships. But basically going to keep it tight in the beginning, kind of drive sales through 40 dealerships and then look at a broader expansion based on the success and ensure to get the model right with the first 40 dealerships. So that is on 3-wheeler.
The second launch will actually be on the heavy commercial vehicle where will start selling limited number of trucks, right, maybe like 30 a month starting again in December. There also has been tremendous response in terms of the interest in the product.
Working on a new facility that we hope to be ready in the first quarter of FY2024.
Tractor, really anticipating kind of a launch either in the last quarter this year or first quarter next year of the smallest tractor.
Basically, import substitution, looking for Engineering division, in the tubes as well as CRSS business. Studied and found that a lot of special strips as well as some tube segments are getting still imported in the country. Working on how to substitute that particularly in TII.
Trucks and 3Ws would break even at over 1000Cr revenues.
Expect railways kicking in from coming quarters in Metal Formed.
Validating a couple more processes to customer in optic lens before starting scaling out any production with them.
At this stage, larger interest is components. See something that requires more intellectual property and R&D, which would be more on the component side.
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